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Derivatives




B-Cap


It stands for a bounded cap; a modified interest rate cap in which the total payout is limited (bounded). The payout is similar to that of an interest rate cap, though limited over the life of the cap to a fixed monetary amount. This feature renders the B-cap less expensive than a typical interest rate cap, but at the expense of the protection it provides in comparison with a standard cap.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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